The industry and the general public might think they understand what defines financial planning, but the existing definitions are so broad that consumers do not always know what to expect from planning professionals.

Worse still, consumers might not even be able to tell how to distinguish the financial planners who operate with integrity from others who do not. Now the Major Firms Initiative of the Financial Planning Association is seeking public comment from the professional community to—hopefully—provide a drum tight definition of financial planning. The organization, based in Denver, has published a whitepaper, “Defining Financial Planning,” and posted it on its sight. The organization will be gathering comments until March 31.

Members of the FPA can access the white paper here.

The idea for the whitepaper began in early 2009, stemming from economic and market unrest, as well as federal regulatory reform, according to the FPA. The need for a solid definition about what the profession entails became even clearer after the Government Accountability Office issued its January report, as required under the Dodd-Frank legislation, Marv Tuttle, the FPA’s executive director and chief executive officer said during a recent meeting. The report concluded that the GAO that it did not have enough information to about the financial planning profession to declare whether it should be regulated.

“This might be useful,” in plugging that information gap, Tuttle said. “One of the things we’re trying to figure out is how we can be more concise and clear to the world about what financial planning is.”

Too many individuals are operating under the term “financial planner” or “financial planning,” yet they are not doing a good job for their clients, or abusing their trust, Tuttle said.

One critical element to the project is setting the scope of a financial planning engagement to consumers, says Marty Kurtz, the 2011 president of the FPA, and president of the Financial Planning Center, an independent, fee-only practice in Moline, Ill. They should know how a financial planner should conduct himself or herself, so that if a meeting or course of action related to their finances does not follow protocols, they know that something is wrong. 

“It is a huge element in consumer protection,” Kurtz said during the meeting. “I think this is where these definitions get so important.”